Rural Cooperation: In The Cooperative Movement in Tanzania

11. Managing Rural Cooperative Societies

11 Managing Rural Cooperative Societies 146 Rural Cooperation: In The Cooperative Movement in Tanzania Management is the science of combining ideas, facilities, processes, materials and labour to produce materials and services by an organization (Roy, E.P 1969: 426). Cooperative management is more than being technically competent. Cooperative management is of dual character in the sense that the member patrons are also the cooperative owners. The actors, processes, and issues in running and managing rural cooperatives are discussed in this chapter. Cooperative management is a process of decision making and controlling the activities of the cooperative for the purpose of achieving the goals and objectives of cooperative society. The management process in cooperatives involves the member owners, the board of directors, the management staff, and the employees. 11.1 Concept of Cooperative Management Cooperative management fosters free circulation of information within the organization through establishing, supporting, and rewarding behaviors based on trust and mutual help. The best interest is that of cooperative actors in order to induce them into participating by mobilizing human skills, processes, as well as financial and technological resources so that the goals of the cooperative can be reached (International Labour Office 1968: 8). Management of cooperatives is an activity done by members, the board of directors, managers and employees. This relationship involves: a) Ownership and control of a cooperative by members; b) Efficient management by management staff; c) Competent direction by the board of directors of cooperative society; and d) Employees implement activities planned (Schaars, M.A. 1970: 17). Cooperative management is essentially collective management. a) There is election of a board of directors of a cooperative according to the principle of democratic participation and control; b) There is collective decision making process on all cooperative plans, tasks and measures to attain the goals and objectives of a cooperative society; c) There is collective responsibility and accountability by the board of directors who hire managerial staff and give guidelines to management on operational policies, goals and objectives of the cooperative organization; and d) Individual employees and members are responsible of implementing the decisions and plans made in the collective management process (Kruger, W. (ed.) 1967: 36). Chapter Eleven 147 11.2 Rules in Cooperative Management a) No person can be a member of more than one rural cooperative society without prior consent of the Registrar for Cooperatives; b) No cooperative member shall hold more than one fifth of the share capital issued and paid of the cooperative society; c) Individual persons may not be members of a cooperative union whose members are primary cooperative societies; d) The promotion of economic interests should be in accordance with cooperative principles and objectives; and e) No registered cooperative shall fix any limit to the number of its members (United Republic of Tanzania, (2005) Section 61). 11.3 Cooperative Members The control of the affairs of a registered society should be vested in the general meeting summoned in accordance with the by-laws of the society and the Cooperative Acts (The United Republic of Tanzania (2005) Section 61(1)). Members participate in general meetings and makedecisionsonpolicies,finances,rules,electionandtheircooperative business. Members pass, adopt and amend by-laws and articles of incorporation. They pass resolutions and motions. Members have the mandate to elect the board of directors and be elected as directors of the board of the cooperative. Members delegate powers to the board of directors to make decisions on their behalf. Members retain their right to approve the policies, budgets, audit reports, and plans of the cooperative. Members are responsible for providing the necessary capital, patronizing the cooperative to the fullest possible extent, paying the cost of operations, assuming the business risk, and keeping themselves informed about the cooperative. In order to control the cooperative, members must be active in their general meetings. Members must elect reliable and capable people to represent them in the board of directors. Members retain the right to approve matters of high and broad policy and to review the actions of their board and management. The annual meeting is held to give members an opportunity to legislate new policies, to review the results of previously adopted policies and to make changes in the plan of operations. The board of directors and managerial staff report to the members of the cooperative at an annual meeting. A clear financial statement should be part of this report. The members are given audited financial reports. At the...